Born in 1973 Roots was founded by Michael Budman and Don Green. United by a summer camp friendship and inspired by the rugged beauty of Algonquin Park, Investor Presentation they set out to create an enduring lifestyle brand that captured the December 2017 essence of the Canadian outdoors.
Disclaimer Non-IFRS Measures and Industry Metrics This presentation makes reference to certain non-IFRS measures including certain metrics specific to the industry in which we operate. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures are not intended to represent, and should not be considered as alternatives to net income or other performance measures derived in accordance with IFRS as measures of operating performance or operating cash flows or as a measure of liquidity. In addition to our results determined in accordance with IFRS, we use non-IFRS measures including EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share. This presentation also refers to comparable sales growth, a commonly used metric in our industry but that may be calculated differently compared to other companies. We believe these non-IFRS measures and industry metrics provide useful information to both management and investors in measuring our financial performance and condition and highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found in our MD&A under “Cautionary Note Regarding Non-IFRS Measures and Industry Metrics”, which is available on SEDAR at www.sedar.com. Forward-Looking Information Certain information in this presentation contains forward-looking information. This information is based on management’s reasonable assumptions and beliefs in light of the information currently available to us and are made as of December 5, 2017. Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of various factors. Information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. Statements containing forward-looking information are not facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. See “About this Prospectus – Forward-Looking Information” and “Risk Factors” in the Company's final prospectus filed in connection with its initial public offering on October 18, 2017, which is available on SEDAR at www.sedar.com, for a discussion of the uncertainties, risks and assumptions associated with these statements. Readers are urged to consider the uncertainties, risks and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. We have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law.
Our Story
Born in 1973 Roots was founded by Michael Budman and Don Green. United by a summer camp friendship and inspired by the rugged beauty of Algonquin Park, they set out to create an enduring lifestyle brand that captured the essence of the Canadian outdoors.
Our Story Differentiating Brand Strengths 1 Iconic Canadian brand with rich heritage 2 Diversified product portfolio with enduring icons 3 Broad demographic appeal with strong loyalty 4 Connective omni-channel experience 5 Experienced and passionate management team
1 Powerful Lifestyle Brand Our Story Helping people embrace the spirit of the open air – wherever they are Rich Canadian Heritage o 99% aided brand awareness nationally Ranked 9 th Canada’s Best Brand, 2017 Canadian Business Magazine o o Built through word-of-mouth and lasting customer affinity Global Reach o Roots transcends borders o Consumers in over 50 countries o 29% of FY2016 system-wide sales outside of Canada o Decades of unpaid celebrity and professional athlete affirmations Decades of Building a Lasting Portfolio Our product values: o Style o Comfort o Functionality o Versatility
2 Diversified Product Portfolio Our Story Inspired by our heritage and guided by customer insights Apparel Leather Accessories Kids Footwear Introduction 57 % 13 % 13 % 13 % 3 % of new styles Y.o.Y. of FY2016 sales of FY2016 sales of FY2016 sales of FY2016 sales of FY2016 sales New Stay True to Our Heritage Enduring Icons New Perennial Favourites Cultivate A Sense of Newness New Seasonal Excitement
3 Broad Demographic Appeal Our Story United by a shared passion for the open air
4 Connective Omni-Channel Experience Our Story Elevated and seamless brand experience in-store and online Unique Retail Concept Powerful eCommerce Platform Heritage Celebrating Exceptional Endless Delivery and Mobile to Storytelling Inspiration the Open Air Service Aisle Returns Desktop Increasing eCommerce penetration over the past three fiscal years Omni-channel sales per customers are ~2.0X greater than sales from a single-channel customer Note: See Disclaimer – Non-IFRS Measures and Retail Industry Metrics.
5 Experienced and Passionate Our Story Management Team Jim Gabel Priscilla Shum Jim Rudyk President and CEO Chief Merchant CFO 24+ years of experience 20+ years of experience 25+ years of experience Diverse leadership experience at Successfully led Shred-it and Strong branding and Adidas (Adidas, Reebok), Wolverine (Saucony, Canada Cartage through IPO merchandising experience at Joe and sale processes Fresh and Club Monaco Merrell), Hanesbrands (Champion) and Mizuno Almira Cuizon Karl Kowalewski Melinda McDonald Michelle Lettner James Connell Alex Jones VP, Retail Operations VP, eCommerce VP, Leather Factory VP, Wholesale and VP, Human Resources VP, Real Estate and Marketing Business Development 15+ years of experience 25+ years of experience 15+ years of experience 40+ years of experience 20+ years of experience 20+ years of experience Launched eCommerce Previous experience at Extensive retail leasing Involved with product design, Increasingly senior roles Previous experience at Roots in 1999 Holt Renfrew and Guess experience at Ivanhoe development, manufacturing and within Roots since 1997 at Target and BMW Cambridge, Oxford sourcing since 1973 Properties and Cadillac Fairview
Roots Today Our Story Relentless Rich Synonymous Global Product Customer Focus Heritage with Canada in Reach Leadership 44 years of 99% national 29% of system-wide Premium apparel, Insights drive designs and stories and aided brand sales generated leather, accessories elevated brand outside of Canada (2) experience awareness and footwear experiences Global Distribution $307MM Sales Channel Mix 87% DTC $48MM Adjusted EBITDA (1) 116 Canada and 4 U.S. corporate stores 13% Partners and other 109 Taiwan and 29 China partner-operated stores eCommerce ships to over 50 countries LTM 10/28/2017 (3) LTM 10/28/2017 Note: See Disclaimer – Non-IFRS Measures and Retail Industry Metrics. (1) A reconciliation of historical Adjusted EBITDA to net income appears in the Appendix to this presentation. (2) In Fiscal 2016. (3) Channel mix as a percentage of sales.
Growth Strategies
UBR Unlocks Future Potential and Growth Strategies Simplifies the Business Consumer-Focused Defined Go-To-Market Simplified Formalized Merchandising Pricing Tiers Sourcing Strategy Calendar ~40% SKU reduction by the end of Fiscal 2018 (1) with implementation of UBR (2) Note: See Disclaimer – Forward-Looking Information. (1) SKU reduction by the end of Fiscal 2018 relative to Fiscal 2016. (2) UBR refers to United Brand Range initiative.
Our Growth Strategies Growth Strategies Multiple levers to drive growth 1 Leverage operational investments 2 Pursue continued growth in Canada 3 Develop footprint in the United States 4 Expand in international markets 5 Deepen our offering in leather and footwear
1 Leverage Operational Investments Growth Strategies Transformational initiatives across our business
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